Running Rewards Programmes Can Be Dangerous, Find the Edge Expert Says in New Article

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Dave Ury has warned against using loyalty programmes to entice customers to remain with a business in the long term, in a Find the Edge article published earlier today.

Dave Ury

If customer churn is a cause of significant concern, then your company needs to fix the core value proposition first

Loyalty programmes often offer companies limited benefits, and rarely address the root cause of problems, Dave Ury has said in a new Find the Edge article.

He uses the article to argue that loyalty schemes should usually be a low priority option, and can actually damage companies if the full consequences are not considered.

Ury said: "Regardless of how you measure customer loyalty and lifetime value, if customer churn is a cause of significant concern, then your company needs to fix the core value proposition first."

"I have nothing against bulldogs, but I know that lipstick doesn’t really change their looks. Fully understand your situation, and create and execute on a broader loyalty strategy first."

He suggests that the time, energy and money required to run a successful programme could be better spent improving the business and creating a company that customers will become naturally loyal to. He also warns of programmes becoming damaging because they are too successful.

Ury said: "A common catch-22 of rewards programmes is that sometimes they work too well in terms of driving behaviour. And, when that behaviour includes point redemption, it can frequently create significant expenses for your business."

"If your Finance Team only likes your programme when a large share of participants don’t receive rewards, can you really expect your programme to yield loyal customers?"

The article can be viewed in full here: http://www.findtheedge.co.uk/leadership/strategy/reward-programmes-are-the-last-thing-you-should-do.

Dave Ury is Marketing Director and Principal of Customer Insight and Lifecycle Marketing. More about him can be found here: http://www.findtheedge.co.uk/expert-panelist/dave-ury.

Kenny Goodman, founder of Find the Edge, said: "Rewards programmes have long been used by business owners to inject some spice into their business, and bribe customers to stay loyal."

"Their effectiveness is very suspect, however, and Dave sets out the case against making them a priority very well in this article."

Find the Edge is a business website where expert panellists can share the knowledge and insight they've picked up over their careers with other members of the business community.

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Kenny Goodman
Find the Edge
07540 368 439 0161 713 2506
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